Ringgit Edges Up Against Dollar as Fed Rate Hike Expectations Weaken

The ringgit experienced a mixed performance against major currencies on Wednesday. Against the US dollar, it gained ground, reaching 4.0785/0820 by 6pm. This rise is attributed to expectations that the US Federal Reserve may hold off raising interest rates next month due to weaker-than-expected consumer sentiment data.

According to Bank Muamalat Malaysia Bhd's chief economist Dr Mohd Afzanizam Abdul Rashid, recent US data points suggest that the Fed might skip a rate hike. He noted that weaker consumer sentiment could weigh on household spending, which accounts for about two-thirds of the US economy.

The ringgit traded lower against other major currencies, however. It fell to 4.6324/6363 against the euro and retreated to 5.4162/4209 versus the British pound. Against Asian currencies, it lost ground as well, dropping to 12.1521/1666 against the Thai baht.

Market players will be closely monitoring the ADP employment and Personal Consumption Expenditures (PCE) reports due later tonight. These reports could influence the US dollar's performance in the near term, with weaker job numbers and lower inflation rates potentially leading to a correction.